What are NFC Mobile Payments?

NFC payments occur when a mobile wallet or an enabled credit or debit card communicates with a payment terminal, sending encrypted payment information from the customer to the retailer.

Mobile wallets are more prevalent than ever, and as a result, NFC mobile payments are also more commonplace. Customers who want an added layer of convenience and protection can use their mobile devices with Apple Pay and Google Pay at retailers whose pos devices support tap-to-pay with cards and mobile payments.

Tap-to-pay cards are now being issued in greater numbers as old cards expire, and banks send replacement cards with this capability enabled by default. Cards with this function have a symbol on them resembling a sideways WiFi icon.

How do NFC Mobile Payments Work?

Near-field communication technology connects the two NFC-enabled devices in close proximity to one another — usually a few inches at most — to transmit payment information. A key differentiator with NFC mobile payments is the two-way encryption, making this a more secure payment option than swiping or inserting a credit or debit card.

The card information is encrypted when sent to the payment terminal, and also requires authorization from the mobile device with either face ID, fingerprint, or a passcode. Once validated, the transaction information is relayed to the NFC terminal with a randomly generated one-time use code which is sent to the merchant instead of the customer’s debit card.

Card information is not transmitted in a way that hackers can use, and the one-time code which sends encrypted payment information cannot be used again, making it useless to hackers. Between needing very close proximity to the terminal and biometric or multi-factor authentication to proceed with the transaction, NFC payments do not happen accidentally and are difficult to compromise.